Gov. Tom Corbett signed Pennsylvania’s $28.4 billion budget for fiscal 2014, a 2.6% increase, three hours ahead of a midnight deadline on Sunday.

But Corbett’s three major policy initiatives – public pension overhaul, a transportation funding bill and privatization of state liquor stores – remained on hold until the fall session, even though Corbett’s Republican party dominates the legislature.

“We do have some unfinished business,” Corbett, who took office in January 2011, told reporters.

The House approved the budget by a 111-92 vote, while the Senate vote was 33-17.

For the third straight year, Corbett increased funding for education and early childhood development. The budget calls for more than $5.5 billion for basic education funding and $1.6 billion for higher education.

The Senate also approved by a 40-10 vote a bill to authorize Pennsylvania to participate in the federal Medicaid expansion program under the 2010 federal health care law that made participation on a state-by-state basis. It now goes to the House.

Corbett, who must approve such a measure, said he wants to study the bill further and negotiate changes with the federal government.

“We have to see a bill that has reforms in it,” said Corbett. “We have to fix it as it applies to Pennsylvanians, to our needs.”

The House passed liquor privatization, but a compromise bill got entangled in the Senate. Meanwhile, a $2.5 transportation funding bill that the Senate approved got bogged down in the House.

Also in the budget was $140 million cobbled from a variety of sources to help Philadelphia's school district plug a $304 million budget gap, although Corbett attached a variety of conditions.

Moody’s Investors Service rates the state’s general obligation bonds Aa2, while Fitch Ratings and Standard & Poor’s rate them AA-plus and AA, respectively.

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